Swiggy plans inventory-led Instamart model to boost quick-commerce margins

MUMBAI: Swiggy is getting ready to put its inventory where its ambition is. The food delivery major is preparing to shift Instamart towards an inventory-led model, bringing its quick-commerce business closer to the playbook followed by rival Blinkit, Reuters reported.

The proposed change follows shareholder approvals that could help Swiggy qualify as an Indian-Owned and Controlled Company (IOCC). The company has proposed a 49.5 per cent foreign ownership cap, a move that could allow Instamart to directly own inventory rather than operate primarily as a marketplace.

Since its launch in August 2020, Instamart has largely worked on a marketplace model, earning commissions on products sold through the platform. An inventory-led structure would allow it to purchase goods directly from brands and manufacturers, hold them across its network and sell them to consumers itself.

That change could give Swiggy greater control over pricing, product assortment and supply, while also improving its negotiating power with suppliers. Analysts have pointed to potential benefits from bulk procurement, lower wastage and closer collaboration with brand partners.

There is also a more immediate prize: profitability. Swiggy estimates that moving Instamart to an inventory-led structure could improve its contribution margin by around 80 basis points. Analysts estimate that this could translate into an additional Rs 4-5 per order.

Instamart’s contribution margin has already been moving in the right direction, improving to negative 0.2 per cent in Q1, from negative 1.8 per cent in the previous quarter. While the improvement signals better economics, the business remains short of sustained profitability.

Swiggy has indicated that the transition could take two to four quarters once the necessary regulatory approvals and corporate restructuring are completed.

The strategy closely follows Blinkit’s own inventory-led journey. The quick-commerce player, owned by Eternal, shifted towards inventory ownership last year and has reported margin improvements for five consecutive quarters, turning positive in the March 2026 quarter.

Blinkit has attributed the improvement to inventory ownership and supply-chain efficiencies, while also expanding into higher-margin categories such as electronics, home décor and gourmet products. The approach has helped it strengthen its position in India’s increasingly crowded quick-commerce market.

For Swiggy, however, owning the stock also means owning the risk. An inventory-led model requires the company to fund purchases, manage working capital and carry responsibility for unsold or excess stock.

That makes the move less about simply changing how Instamart sells and more about changing the economics underneath every order. With Blinkit, Zepto, Amazon, Flipkart and Reliance all competing for a slice of India’s fast-growing quick-commerce market, Swiggy is betting that greater control over the shelf could finally give Instamart more control over the bottom line.